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Saturday, 25 April 2015

PART II: 21st CENTURY CHALLENGES TO AMERICAN DEMOCRACY

Rising Public Debt, Dwindling Democracy.

Conservatives attribute the rising public debt to government spending on costly
entitlement and social programs. They conclude that deficit financing for entitlement
and social programs poses a threat to the free market which they equate with
democracy. Liberals argue that the fiscal system favors the top income groups
and such capital concentration poses a threat to a pluralistic society and the
market itself. The public debt is indeed massive by historical standards for a
peacetime economy. However, the US still has the advantage of using the dollar
as a reserve currency that is more universally used for trade and transactions
than any other, thus keeping interest rates low and funding “vertical economic
growth” focused on capital goods and luxuries, as opposed to horizontal growth
focused on labor intensive projects for the benefit of the mass consumer. (Romina
Boccia, “How the United States’ High Debt Will Weaken the Economy and Hurt
Americans. The Heritage Foundation”, 12 February 2013)

With rising GDP-to-debt ratio rates and with other reserve currencies on
the horizon, the US does not have the luxury it has enjoyed since Bretton Woods
in 1945 with regard to the dollar as the premier world currency. If the public
debt is not contained by slashing the corporate welfare programs through
subsidies and fiscal system as well as trimming defense that remains the
largest in the world, then US debt-to-GDP ratio will double by the middle of
the century. This will mean a weaker dollar and a weaker and smaller middle
class that historically has been the backbone of American democracy. While the
public debt by itself does not constitute a threat to American democracy,
combined with other egregious policies it is a challenge because it is not
creating wealth and raising productivity for the benefit of all, but
concentrating wealth for the top one percent of the richest Americans.

Because there are foreign buyers of US treasuries and largely because China
needs the US as a market as much as the US needs China to buy bonds, the dollar
remains stable for now despite a debt-to-GDP ratio that could reach 190% by the
early 2030s, according to the Congressional Budget Office. In 2008 when the
global financial crisis started as a result of the subprime lending among other
bank and insurance company scandals for which the US taxpayers had to pay
bailout funds, US debt-to-GDP ratio was just 64%. In 2014 the ratio stands at
102%, costing taxpayers $223 billion. Servicing the debt amounts to 6.5% of the
budget, which is still less than half of what it costs Japan to service its
debt. The public debt per se is not the issue assuming that funding is used to
finance future growth and development.

If there is continued borrowing to finance the military industrial complex
and to continue the corporate subsidies, instead of financing labor-intensive
economic growth, then the debt cycle will continue growing and falling more
heavily on workers and middle class whose living standards will suffer more
losses. While the US was a net debtor nation from its independence until the
outbreak of WWI, the debt in the 19th century was invested in the
civilian sector resulting in rapid modernization of the agrarian and mining
sectors as well as manufacturing. It was not until the late 1880s-early 1890s
that funds were expended to build a major defense sector. The result was upward
socioeconomic mobility. After 1980, debt at unsustainable levels has been
crippling, especially when it was not directed toward productive enterprises
that create more wealth for the broader middle class. As the popular base of
American democracy weakens partly because of the rising debt, this will have an
impact on democracy no differently than in other debtor countries under
austerity.

Finally, the debt burden falls inordinately on the middle class and
workers, undermining not just social programs that would otherwise benefit
society, but the fabric of a democratic society with a modicum of social
justice as its base. One could argue that this would all be well worth it if it
resulted in “horizontal economic growth” in which the broader middle class and
workers benefited. However, debt crises only result in massive capital
concentration and austerity politics results in authoritarianism. Debt becomes
a creditor’s tool of influencing if not determining policies that the debtor
must follow, thus losing national sovereignty. (Michael Moran, The
Reckoning: Debt, Democracy, and the Future of American Power; Samuel
Rines, “How Debt Destroys Democracy” The National Interest,October
2013; Andrew Ross, Democracy and Debt. http://what-democracy-looks-like.com/democracy-and-debt/)

Systemic Inequality, Corporate Power, and Parasitic Economics.

When the American Republic was founded,
there was an institution of slavery, native Americans were marginalized with
their condition becoming much worse a century later, women had no political
rights, and social inequality was very much alive and deemed “normal”. Despite
progress toward democratization of society in the past 200 years, the republic
remains an unequal society in the early 21st century characterized
class, racial, ethnic, and gender inequality.

If we assume that industrial, technological
and scientific progress necessarily yielded overall progress for society,
including a course greater not less democracy, it would not be a wrong assumption.
However, it would be wrong to assume that the Industrial and Scientific
revolutions in 19th and 20th century America necessarily
represent a parallel course toward democratization. The reason for this is that
as much in the 19th century as in our own times, affluence simply
buys influence. (Martin Gilens, Affluence and Influence: Economic
Inequality and Political Power in America)

Hardly any political observer of American
politics is unaware of how money buys favors that includes everything from
subsidies to corporations to export their products, to tax breaks and tax
loopholes for the very rich. Just one look at the occupancy rates of lobbyist
office space in Washington D.C., northern Virginia and southern Maryland, and
immediately there is a realization that entrenched corporate interests have a
keen interest in determining policy. In some cases, the lobbyists actually
draft the bills that go before Congress, in others, lobbyists have the last
word and only conflicts among the disparate capitalist interests within the
same sector or in different sectors are resolved through political compromise.
(Ailsa Chang, “When Lobbyists Literally Write the Bill”, 11 November
2013,WWW.NPR.ORG;
Jeffery Birnbaum, The Lobbyists: How Influence Peddlers Work Their Way in Washington)

If lobbyists determine policy on behalf of
business, and if politicians do not take into account the general welfare of
the broader population, is it any wonder that for the last four decades the US
has been experiencing a downward social mobility and decline in democracy? One
of the characteristics of American society in the early 21st century
is inherited socioeconomic immobility. Unlike the children of the working class
in the post-WWI decade, the children born in this new century to workers are
unlikely to move into the middle class. There are
very few mainstream media outlets that even cover this issue and those that do
insist that inequality is not a threat to American democracy.

It is no secret that the US has one of the worst records among the G-20 in
income distribution, any more than it is a secret that the US has one of the
world’s highest wealth concentration, thus inequality, and a rapid downward
socioeconomic mobility. Such polarization in the economic domain leads to
political polarization, or at the very least alienation and this is a
contributing threat to democracy. Advocates of neoliberal policies insists that
the problem is not lack of fair income distribution, but government legislating
minimum wage, safety, health and environmental standards, and layers of
bureaucratic costs that make it difficult for companies to reinvest. (Richard
Fry and Rakesh Kochhar, America’s wealth gap between middle-income and upper-income families is
widest on record. Pew Research Center, 17 December 2014)

Many conservatives insist on slashing entitlements and revamping the entire
social welfare system as we have known it, and just let the market fix
everything the way it did in the Gilded Age! If government simply offered the private
sector “opportunities” through contracts for all services performed by public
employees, then all would be grand with society. As long as government
outsources all services from cleaning services to complex engineering projects
to the private sector, and as long as government keep paying those subsidies to
corporations, bails out banks and insurance companies during recessions, and
makes certain they paid the lowest possible taxes, there would be no problem
whatsoever with society.

Therefore, democracy equals a neoliberal
approach to public policy and opportunities for businesses carrying out
government contracts. Where would this leave the middle class and workers is up
to them individually based on what they have to offer the marketplace. Where
would this neoliberal model leave citizens demanding accountability for all
public services? Even today we can see the striking difference in everything
from street maintenance to the condition of parks between an urban slum and a
wealthy neighborhood. This reflects the very real class divide and reveals the fundamental
inequality in services, no matter what politicians claim about government
serving all people equally.

The real prospect that inequality will become worse and a permanent feature
of American society poses a huge threat to democracy. Apologists of the
political economy insist economic inequality is not a challenge for American
democracy because inequality is simply a “natural” condition reflective of
individual effort and ambition. Even those acknowledging there is a systemic problem
propose that it can be solved only by raising productivity, not redistributing
income. US productivity rates averaged about 3% from 1995 until 2005, outpacing
the rest of G-7. Despite such impressive productivity rates surpassed only by
China and the BRIC group, the middle class and workers continued to experience
downward trend of incomes. Therefore, the productivity argument, which has been
used since Adam Smith in the late 18th century, is hardly pertinent.
Meanwhile, massive wealth concentration is a major problem for both the economy
and democracy. The media and most in society applaud the news that Amazon CEO
Jeff Bezos made close to $5 billion in profit in a single day on 24 April 2015,
while a few may ask how can one individual make more money the combined annual GDP
of eight sub-Sahara countries? According to the
Wall
Street Journal, America’s richest 3% experienced a 30.5% of income
rise, in 2013, while the bottom 90% of income earners continue to lose income.
According to various studies, the inequality gap is very real and becoming
worse. In fact, US inequality is worse now than it was on the eve of the Great
Depression, signaling a crisis in the economy and society. (Emma Bell, Soft Power and Freedom under the Coalition: State-Corporate Power and
the Threat to Democracy)

Besides the grossly uneven income
distribution impacting democracy, there is also the issue of the parasitic
nature of the economy. There are many studies on banks and financial firms as
parasites, just as there are studies about consulting firms and defense
contractors as parasites, especially since they overcharge and their services
are of dubious quality. One could argue as neoliberals do that dishing out
contracts, even to parasitic entities, is one way to keep the private sector
strong, even if it offers nothing back to society. Clearly, the narrow
definition of a parasite to an economy is one that only takes and adds nothing
to growth, productivity or value to the economy in the present or future, thus
weakening it for the majority so the minority benefits. There are many examples
from which we can illustrate this point, but let us take one that the New York Times exposed regarding the role of Goldman Sachs in the last ten years,
although the same strategy has been carried out by J. P. Morgan among other
major firms.

When Goldman purchased Metro International aluminum warehousing
company, it slowed shipping to such a degree that Goldman realized $165 million
per year in rents for the stored aluminum, not counting the sharp rise in
profits resulting from higher metal price because of the artificial shortages.
This is the same Goldman firm that was helping Greece and other governments
during the 1990s and early 2000s to convert debt into assets on paper only, of
course in order to deceive creditors and regulators. This illegal enterprise
realized millions in hefty fees for Goldman and fooled the EU regulators, at
least until the EU demanded an end to this practice. Ironically, at the time of
these illegal activities, European Central Bank chief Mario Draghi was the head
of Goldman’s international division!

Most large US and EU banks have been involved in
scandals amounting to hundreds of billions in illegal activities resulting in
the collapse of the financial system from 2008 until 2013. The bailout for the
private banking system came from public money.US and European banking scandals in the last two
decades are salient factors in the massive transfer of capital from society
into the hands of very few people. This as government repeatedly intervenes to
save banks using taxpayer money and lowering living standards for the middle
class and workers in the process, but justifying it on the basis of a) too big
to fail, and b) jobs would be lost.

All along, the media has been singing the praises of
the “heroic capitalist” while vilifying the state as the culprit in these
scandals, as though the state has been acting on behalf of the general public
instead of finance capital. Banks demanded deregulation so they can engage in
high risk practices with funds of depositors that they gambled, and for which
they had to pay billions in punitive fines both in the US and European
governments. Yet, according to the media the fault rests with government for
failing to do its job right. (Steve Schifferes and Robert Manning, eds., The Media and Financial
Crises: Comparative and Historical Perspectives)

Beyond the systemic problem of legal and illegal parasitic
capitalism that is global and not the domain of a single country, there is the
direct correlation between healthy economic development and a thriving
democracy. Healthy economic development where the benefits are fairly
distributed among workers and the middle class that produce wealth and
democratization of society cannot possibly take place when a tiny percentage of
the population owns the vast wealth and keeps recycling it without investing
for the broader good of all people. The higher the level of parasitic economic
activity in a society, the lower the level of democracy, a phenomenon
invariably associated with underdeveloped nations but actually plagues the US
and the EU. (Tatu Vanhanen, Democratization: A Comparative Analysis of 170
Countries;Nicholas Ryder, Financial Crime in the 21st
century: Law and Policy; Ismael Hosein-zedeh,Beyond Mainstream Explanations of the
Financial Crisis: Parasitic Finance Capital).

According to a Rolling
Stone article, the London-based firm ICAP which is the world’s largest
broker of interest-rate-swaps, has been involved in a massive banking scandal.
The interest-rate-swap market is worthy $379 trillion, which means that ICAP in
essence has the immense power of manipulating massive amounts of capital by
fixing rates and manipulate the market on behalf of its clients that include
the largest US and EU banks. The shocking thing here is that the US government
draws some of its top people to run various departments, including Treasury
from financial institutions that the Justice Department has repeatedly fined
for all sorts of violations. How can democracy possibly function in practice as
it is conceived in theory when the same people who manipulate markets to the
benefit of the very few insider investors that government entrusts the
mechanisms of running a democracy?http://www.rollingstone.com/politics/news/everything-is-rigged-the-biggest-financial-scandal-yet-20130425#ixzz3Y4HyHpDJThe Supreme Court and the new Gilded
Age

Is the Supreme Court out of touch with the American people and has the
nation’s highest court reverted to the Gilded Age of the late 19th
century during the era of robber barons? The role of the Supreme Court has
always been very important in interpreting Constitutional law and its rulings
are significant in either strengthening democracy for all citizens, or
weakening it so that the privileged few may prevail. In September 2014, senators Tom Udall and Bernie Sanders wrote that a
century of hard won battles to create a more democratic society have been
obviated by recent developments. For example, American democracy has become
less inclusive because the Supreme Court has 1) struck down important elements
of the Voting Rights Act and 2) diluted campaign finance laws, permitting even
greater influence by the very rich in the political arena.

As campaigns become increasingly more expensive, a few
hundred people directly and through various entities, including super-PACs,
exert dominant influence in politics. It is for these people that policy is
formulated to the detriment of the rest of society because they have paid to
elect politicians at every level of government. The Supreme Court justified
buying political influence with the First Amendment that constitutionally
protects free speech. Senators Sanders and Udall argued that: “Americans’ right to free speech should not
be proportionate to their bank accounts.”

When the Supreme Court becomes an impediment to
democracy and fails to protect all citizens so that it can serve the
politically entrenched elites, then the democratic regime itself has suffered a
damaging blow. The republic survived the Gild Age when the Supreme Court was
serving the narrow interests of the very rich, and it will survive the
criticism today that it has reverted to 19th century undemocratic
thinking. However, no matter how much the Supreme Court tries to legitimize
social injustice people know the difference between what is just for a society
and what is unjust. This is something that Justice Louis Brandeis grasped more
than any other Supreme Court Justice as he realized that a democratic
government must balance societal inequities that industrial capitalism produces
to represent the interests of all social classes. Everything from utility
regulatory powers to setting up a social safety net were issues with which
government has a legitimate role to preserve the pluralistic nature of liberal
democracy evolving under a rapidly changing political economy. Serving in the
court during the tumultuous interwar era, Brandeis recognized the
contradictions of capitalism and democracy, stating that: “We can have democracy in this country or we can
have great wealth concentrated in the hands of a few, but we cannot have both.”

During the “Warren Court” era under Chief Justice Earl
Warren, 1953-1969, America actually made moderate progress toward realizing the
democratic goals of the Constitution. Key constitutional amendments dealing
with equal rights for minorities were ratified, while at the same time the
political climate moved toward greater pluralism and tolerance and away from
the apartheid conditions that existed before the Civil Rights movement. The
Supreme Court in the recent decades, especially in the last two, has devoted
itself to striking down all progress of the part with regard to equal rights,
free speech, and due process, while using free speech to strengthen the role of
big capital.

At the same time, the Supreme Court ruled in favor of
violating human rights when it came to Guantanamo Bay detainees, in direct
conflict with the UN Human Rights Commission. That the US Supreme Courts fails
to safeguard human rights and civil rights, while using Constitutional
amendments to strengthen the wealthy is indicative how far from the people and
from any sense of justice it has been and remains to this day. Supreme Court
Justice Ruth Bader Ginsberg has warned that if there are no limits on campaign
contributions, the result will be that a few hundred people will control the
country. Justice Ginsberg recognized the dangers to democracy of massive wealth
concentration just as did justice Brandeis several decades before her, but
these were and remain minority opinions in the history of the Supreme Court. (Ian
Millhiser, Injustices: The Supreme Court's History of Comforting the Comfortable
and Afflicting the Afflicted; Lawrence Goldstone,
Inherently Unequal: The Betrayal of Civil Rights by the Supreme Court)

Islamophobia
and Terrorism, and Right-Wing Politics

In the early
1990s, it appeared the Cold War as a way of life was coming to an end. However,
the US would only replace it with counter-terrorism and simply transfer the
anti-Communist ideology and institutions into the domain of anti-terror
ideology and institutions, thus perpetuating the status quo. This was done in
part because it was the only way to justify maintaining very high levels of
defense spending, in part to keep the global imperial network as leverage for
global hegemony, and in part to continuing forging a popular consensus around
security issues. In the absence of Communism as a threat to Pax Americana,
militant Islam had to be invented as a global security threat. First there was
the imminent threat from Iran after the 1979 revolution, simply because Iran
was no longer economically, militarily and politically obsequious to the US. Then
the alleged security threat of Saddam Hussein became a massive regional threat
to all of the Middle East and by extension to the US because Iraq. Finally,
came 9/11 that allowed for the US-led global anti-terror campaign. All of these
were massive threats to American democracy as far as both Republican and
Democrat politicians were and still are concerned. The only question was the
degree to which Islam jihadists posed the kind of threat the US government described.
Secondly, is such a threat the underlying cause undermining democracy or is the
government’s institutional structure intended to combat the threat the real
obstacle to democracy?

If the war on
terror had actually reduced instead of increased both the number of jihadists
while lessening the culture of fear resulting from the institutionalization of
counter-terrorism, then one could argue that it was worth the sacrifice of
human rights and civil rights, of democracy, and social justice. The
institutional structure – Homeland Security, “war on terror” unilateral foreign
policy, and police-state methods that override all civil rights and human
rights – remain in place in a country that calls itself a ‘democracy’ and
committed to spreading its values, rather than economic imperialism throughout
the world.

According to
one poll, only 20-40% of Americans were immersed in fear one year after 9/11,
while in 2014 the fear factor ranges from 47% -65%. It is ironic that the
wealthiest country in the world is terrified by a culture of fear that the
media, both conservative and liberal, reinforces on a daily basis. This is
largely because the elites have succeeded conditioning the majority of
population to subordinate their democratic impulses to the “emergency security
state” as though the US is in perpetual war. The end result is an inward-looking
population afraid to question the existing social order and political regime
that values conformity far more than it does pluralism, equality, and freedom.

While the mass
psychology of fear may appear counterproductive to those advocating pluralism,
democracy, equality, social justice and creativity as core values in society,
as far as the political, social and economic elites are concerned the culture
of fear helps to engender conformity at all levels and helps to maintain
loyalty to the existing social order and political economy that strengthens the
hierarchical structure. The domestic implications of the counter-terrorism
regime can be seen on the role of city police departments toward black males
and minorities in general. Islamophobia has wider implications of how
authorities see illegal immigrants from Latin America and blacks. The idea that
the minority is the enemy is deeply rooted in the culture of intolerance by the
white majority toward the non-white minority. White there is videotaped
evidence of repeated patterns of behavior on the part of the police toward minorities
the mainstream media continues to defend the police forces, focusing not on the
political culture of intolerance but on the “unusual singled out” action of a
cop killing a black male. The challenge of American democracy in the 21st
century is to leave the culture of fear behind, something that cannot be done
unless the government abandons the political culture of counter-terrorism
targeting Muslims as though they are the new Communists about to take over
Omaha from the good Christian folk.

When one
listens to right wing talk radio and watches TV programs such as FOX News,
listens to right wing politicians demonize Muslims and castigate Latin
immigrants, it is easy to understand why a segment of the American
institutional structure has abandoned all pretenses to dealing with citizens of
a democratic society. Just as there is a
crusade to hunt down and kill militant Muslims in Afghanistan, among other
places, similarly there is a crusade against minorities at home if their class
status does not transcend their ethnicity and race. All along, the Justice
Department has done nothing about the sharp deterioration in tolerance at the
institutional level, let alone at the cultural that receives its messages from
the media.(Carl W. Ernst, Islamophobia in America: The Anatomy of Intolerance;
Clifford A. Kiracofe, Dark Crusade: Christian Zionism
and US Foreign Policy)

The evangelical wing of the Republican Party has opportunistically used the
“war on terror”, just as it used the anti-Communism during the Cold War to
promote its own agenda and elect officials who embrace that agenda. It is not
that the Republican evangelicals believe they can create a theocracy, but they
know that they can use the counter-terrorism issue just as they used the
Communism issue to engender sociopolitical conformity, and distract the
American people from social and economic interests impacting them. Using
religious fanaticism to polarize society and maintain conformity and a docile
population, the government and media add the moral-religious dimension to
foreign policy issues intended for domestic political consumption. This
undermines the very fabric of America’s pluralistic tradition and poses a major
challenge to democracy. If the evangelical wing of the Republican Party did not
have behind it millionaires and billionaires supporting its agenda, and if it
did not have the mainstream media, then its voice would be a faint one. What
makes it powerful is the big money hiding behind the message, not the message.
(David Green: The Biblical Billionaire Backing
The Evangelical Movement; FORBES, October 8, 2012; William V.
D’Antonio, et al. eds., Religion, Politics, and
Polarization: How Religiopolitical Conflict Is Changing Congress and American
Democracy)

The assumption that the threat to democracy is coming from out there
somewhere, from evildoers whether they are Islamic jihadists or Russian
nationalists is utterly absurd. Democracy falls from within under its own
weight when it deviates from the social contract. The great Athenian writer
Aristophanes realized this 2,500 years ago. American journalist and
Presbyterian minister Chris Hedges argues in “How Democracy Dies: A Lesson from
the Master” (Aristophanes) that society decays from within by corruption,
greed, arrogance, distortion of ideals designed to promote the welfare of all
people, and of course perpetual militarism that debilitates society and
ultimately contributes to its demise.

“There is a yearning by tens of millions of Americans, lumped into a
diffuse and fractious movement, to destroy the intellectual and scientific
rigor of the Enlightenment. They seek out of ignorance and desperation to
create a utopian society based on “biblical law.” They want to transform
America’s secular state into a tyrannical theocracy. These radicals, rather
than the terrorists who oppose us, are the gravest threat to our open society.
They have, with the backing of hundreds of millions of dollars in corporate
money, gained tremendous power. They peddle pseudoscience such as “Intelligent
Design” in our schools. They keep us locked into endless and futile wars of
imperialism. They mount bigoted crusades against gays, immigrants, liberals and
Muslims. They turn our judiciary, in the name of conservative values, over to
corporations. They have transformed our liberal class into hand puppets for
corporate power.”(Chris Hedges,Democratic Underground, October
2010)

"A
gripping, passion-filled, and suspenseful tale of love, betrayal,
political and religious intrigue, this novel entices the reader’s
senses and intellect beyond conventions. Slaves to Gods and Demons
takes the reader through a roller coaster enthralling journey of
personal trials and triumphs of a family emerging vanquished and
destitute after World War II.

Narrated by a young boy, Morfeos, modeled after the Greco-Roman pagan
deity of sleep and dreams, the book reveals the soul of a people trying
to ascertain and assert their identity while rebuilding their lives and
recapturing the glory of a lost civilization.

Seeking liberation from restraints of time, social conventions, and
binding traditions, the deity of dreams provides the conformist and the
free-spirited characters in the novel with venues for redemption that
are mere paths toward illusions. Exploring the complexities of human
relationships shaped by priest and politician alike, the novel rests on
the central theme that life is invariably a series of illusions, some
of which are euphoric, most horrifying, all an integral part of daily
existence.

Striving for purpose amid life’s absurdities after the destruction of
western civilization in two global wars, the characters in Slaves to
Gods and Demons struggle between holding on to the glory and grandeur of
a pagan legacy and the Christian present shaped by contemporary
secular events in Western Civilization."